Computer Associates International Wednesday said channel sales declined as the company reported a narrowed fourth-quarter loss on single-digit revenue growth.
For the quarter ended March 31, CA reported a loss of $106 million, or 18 cents per share, compared with a loss of $238 million, or 41 cents per share, the same quarter a year ago.
CA reported revenue for the quarter of $801 million, up 4 percent from $772 million the same quarter a year ago.
In breaking out the company's revenue, CFO Ira Zar said "software fees and other," the business category primarily representing CA's indirect channel business, dropped about 13 percent compared with the same quarter last year.
"As we reported in previous quarters, and especially in a tough economic environment, we have found it challenging to get the same closure rates via the channel as compared with our direct-sales teams," Zar said.
The company expects new products such as BrightStor ARCserve Backup Version 9, launched last year, and the recently launched eTrust Antivirus version 7 to help grow channel sales, Zar said.
CA also saw year-over-year declines in fourth-quarter revenue from professional services, maintenance and financing fees.
Those declines, however, were offset by 46 percent growth in CA's subscription revenue.
Excluding certain items, CA reported a profit of 8 cents per share, beating financial analysts' estimates by 2 cents per share.
Analysts expected CA to earn 6 cents per share on revenue of $795 million for the quarter, according to Thomson Financial/First Call.
For the fiscal year 2003, CA reported a loss of $267 million, or 46 cents per share, compared with a loss of $1.1 million, or $1.91 per share, the year before. Channel sales were down about 9 percent for the full year, Zar said.
"IT buyers continue to be conservative in their spending habits and are demanding to know the ROI for all of their purchases," said Sanjay Kumar, president and CEO of CA, Islandia. "Yet we are finding that they are willing to invest in the right kind of technology," he said.
Kumar also touched on CA's launch last month of an on-demand computing strategy to deliver management software that dynamically allocates IT infrastructure to support the changing demands of business services.
"Everybody is talking about [on-demand computing], and I think rightfully so," Kumar said. "On-demand computing solves three complex and key issues customers face every day: one is complexity, the second is efficiency and the third being cost," he said.
The company last month launched new Unicenter network management products in support of the initiative and plans in upcoming months to expand the strategy to include storage and security products as well, he said.
Looking ahead to the first quarter, CA expects to report an earnings loss of 3 cents to 4 cents per share on revenue in the range of $795 million to $810 million. For fiscal 2004, the company projects a loss of 5 cents to 10 cents on revenue in the range of $3.27 billion to $3.43 billion, Kumar said.
Shares of CA closed up 60 cents at $18.19 Wednesday prior to CA's earnings report.